Government-owned Bharat Electronics (BEL) on Wednesday declared a bonus issue of equity shares in the ratio of 2:1. Simply put, an investor will receive two bonus equity shares for every one equity share held in the company. In a meeting held on Thursday, the company’s board of directors decided issuance of bonus shares to the shareholders by capitalizing nearly ₹487.32 crore. BEL witnessed upbeat sentiment with shares nearing a 52-week high. BEL shares have climbed nearly 4% in one day. In its regulatory filing, BEL said, “issue of bonus shares to the shareholders of the company in the ratio 2:1 (two bonus equity shares for every one equity shares held) by capitalising ₹487.32 crore standing to the credit of the free reserves and surplus of the Company.” Generally, a listed company distributes bonus shares on their equity shares to current shareholders free of charge. Through this, a shareholder can capitalise a part of the company’s retained earnings for conversion of its share premium account, or distribution of treasury shares. Notably, the company has received approval for increasing authorized share capital by ₹500 crore ahead. The Administrative Ministry accorded approval for the same on August 1. It needs to be noted that in January this year, BEL intimated its plan to increase authorized share capital from ₹250 crore to ₹750 crore. Further, the company rescheduled its 68th Annual General Meeting (AGM) to August 30 from earlier August 25.
That said, the proposal for bonus shares and raising of authorised share capital is now subject to shareholders’ approval in the AGM.
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